An Awkward Truth About Segments of American Work

Opinion: Direct-selling schemes are considered fringe businesses, but their values have bled into the national economy.

Excerpt: Read’s indictment of MLM outfits is predictable enough, but her research also reveals how much corporate America has in common with this shady economy, which has long been dismissed as a kooky sideshow. Corporations have borrowed from the methods of MLM companies—hiring large, contingent workforces; pushing employees to think like entrepreneurs; and lobbying hard for friendlier regulations.

MLMs turn out to be more closely aligned with the center of corporate life (and political power) than many people might like to think.

A key innovation of the industry was to rely on a fleet of temporary workers. During the Great Depression, when Franklin D. Roosevelt’s administration was expanding the social safety net and implementing muscular work protections, an organization then called the National Association of Direct Selling Companies agitated for a carve-out that would designate salespeople as “independent contractors” rather than employees.

Historically, such contractors had occupied a tiny niche, but in a time of expanding regulation, classifying workers in this way became a handy loophole. This category later set the template for tech start-ups, including Uber and DoorDash, that challenged traditional full-time employers.

As of July 2023, about 4 percent of the American workforce had temporary jobs as their main or only role, and an additional 7.4 percent of Americans were independent contractors, according to a survey from the Bureau of Labor Statistics.

That percentage may seem small, but it encompasses millions of workers and outnumbers many sectors of employment; other surveys find that tens of millions of Americans do such work for supplemental income too. As Read writes, “The part-time, low-paid work that direct selling pioneered” now “defines our current labor market rather than covers its gaps.”